Brazil's Ambev reports lower recurring net profit on higher costs

Fourth-quarter recurring net income was 3.724 billion reais ($999 million), Latin America’s largest beverages firm said in a statement, down 17.3 percent from a year earlier.

Before one-off items, net income rose 5 percent.

Ambev said that higher revenue per hectoliter more than compensated for a drop in fourth quarter volumes. It said net revenue was 16 billion reais, up 6.6 percent year-on-year.

However, the cost of goods sold rose by 21.3 percent, to 6.05 billion reais which Ambev said was the result of inflationary pressure in Argentina and higher commodity prices.

The brewer said its cost of goods sold per hectoliter is likely to rise further in Brazil, forecasting an increase of 15 percent for 2019 due to currency depreciation and higher commodity prices. ($1 = 3.7285 reais) (Reporting by Carolina Mandl Editing by Alexander Smith)